RAMALLAH, West Bank, May 10 (Reuters) - Palestinian unity is crucial to peace with Israel and the pact between the secular Fateh and Islamist Hamas movements must be given a chance, Palestinian Prime Minister Salam Fayyad said on Friday.

I am satisfied that we are on the verge of the process of putting the country back together, he told France 24 television in an interview.

Starting the process of reconciling the two rival factions, which fought a brief civil war in 2007 over the Gaza Strip, is absolutely essential, even if it was not achieved immediately, Fayyad added.

The reconciliation agreement between Hamas and Fatah, announced in Cairo at the end of April, came as a surprise after 18 months of Egyptian mediation, and was greeted with caution the West and by some sceptical Palestinians.

Hamas does not accept Israel's right to exist, unlike Fateh which is trying to negotiate a two-state solution creating a state living in peace alongside Israel on West Bank, Gaza Strip and East Jerusalem, lands the Jewish state captured in the 1967 Middle East war.

Fayyad indicated he was also surprised by the deal but called it a good starting point.

It's great that we have it. The real test is implementation, said the Western-backed former World Bank economist.

A consensus government of independents, to which Fateh and Hamas agreed, must be formed in short weeks to demonstrate the deal would have concrete consequences, he said.

The deal includes a security component that is adequate from our point of view ... and consistent with what is necessary, Fayyad said.

Israeli Prime Minister Benjamin Netanyahu urged Palestinian President Mahmoud Abbas, the leader of Fateh, to reject reconciliation. He said the pact would let Hamas block all hopes of a peace treaty with Israel.

Fayyad said Hamas leader Khaled Meshaal had made it clear he accepted the goal of a state of Palestine based on 1967 borders.

Hamas's charter calls for reclaiming all the land of the former British mandate, including Israel.

He said that like the Israeli coalition, the Palestinian national movement is made up of different factions which do not share the same views uniformly.

It's important to find a way to govern ourselves effectively, taking into account that we do not all have the same political persuasions, Fayyad told France 24.

The deal announced in Cairo does not live up to the gold standard but, relative to the status quo, it is vastly superior, he added.

The reconciliation pact can take us to a much better place, vastly superior to where we are today, he said.

How is it going to be possible for us Palestinians to get a sovereign state of Palestine where we can live with dignity unless Gaza is an integral part of that mix? We can't.

(Additional reporting by John Irish in Paris)(Writing by Douglas Hamilton; editing by Andrew Dobbie)